Home > 105th Congressional Bills > H.R. 1151 (enr) To amend the Federal Credit Union Act to clarify existing law with regard to the field of membership of Federal credit unions, to preserve the integrity and purpose of Federal credit unions, to enhance supervisory oversight of insured cred...H.R. 1151 (enr) To amend the Federal Credit Union Act to clarify existing law with regard to the field of membership of Federal credit unions, to preserve the integrity and purpose of Federal credit unions, to enhance supervisory oversight of insured cred...
105th CONGRESS
2d Session
H. R. 1151
_______________________________________________________________________
AN ACT
To amend the Federal Credit Union Act to clarify existing law with
regard to the field of membership of Federal credit unions, to preserve
the integrity and purpose of Federal credit unions, to enhance
supervisory oversight of insured credit unions, and for other purposes.
105th CONGRESS
2d Session
H. R. 1151
_______________________________________________________________________
AN ACT
To amend the Federal Credit Union Act to clarify existing law with
regard to the field of membership of Federal credit unions, to preserve
the integrity and purpose of Federal credit unions, to enhance
supervisory oversight of insured credit unions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Credit Union Membership Access
Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The American credit union movement began as a
cooperative effort to serve the productive and provident credit
needs of individuals of modest means.
(2) Credit unions continue to fulfill this public purpose,
and current members and membership groups should not face
divestiture from the financial services institution of their
choice as a result of recent court action.
(3) To promote thrift and credit extension, a meaningful
affinity and bond among members, manifested by a commonality of
routine interaction, shared and related work experiences,
interests, or activities, or the maintenance of an otherwise
well-understood sense of cohesion or identity is essential to
the fulfillment of credit unions' public mission.
(4) Credit unions, unlike many other participants in the
financial services market, are exempt from Federal and most
State taxes because they are member-owned, democratically
operated, not-for-profit organizations generally managed by
volunteer boards of directors and because they have the
specified mission of meeting the credit and savings needs of
consumers, especially persons of modest means.
(5) Improved credit union safety and soundness provisions
will enhance the public benefit that citizens receive from
these cooperative financial services institutions.
TITLE I--CREDIT UNION MEMBERSHIP
SEC. 101. FIELDS OF MEMBERSHIP.
Section 109 of the Federal Credit Union Act (12 U.S.C. 1759) is
amended--
(1) in the first sentence--
(A) by striking ``Federal credit union membership
shall consist of'' and inserting ``(a) In General.--
Subject to subsection (b), Federal credit union
membership shall consist of''; and
(B) by striking ``, except that'' and all that
follows through the period at the end of such sentence
and inserting a period; and
(2) by adding at the end the following new subsections:
``(b) Membership Field.--Subject to the other provisions of this
section, the membership of any Federal credit union shall be limited to
the membership described in 1 of the following categories:
``(1) Single common-bond credit union.--1 group which has a
common bond of occupation or association.
``(2) Multiple common-bond credit union.--More than 1
group--
``(A) each of which has (within such group) a
common bond of occupation or association; and
``(B) the number of members of each of which (at
the time the group is first included within the field
of membership of a credit union described in this
paragraph) does not exceed any numerical limitation
applicable under subsection (d).
``(3) Community credit union.--Persons or organizations
within a well-defined local community, neighborhood, or rural
district.
``(c) Grandfathered Members and Groups.--
``(1) In general.--Notwithstanding subsection (b)--
``(A) any person or organization who is a member of
any Federal credit union as of the date of the
enactment of the Credit Union Membership Access Act may
remain a member of such credit union after such date;
and
``(B) a member of any group whose members
constituted a portion of the membership of any Federal
credit union as of such date of enactment shall
continue to be eligible to become a member of such
credit union, by virtue of membership in such group,
after such date.
``(2) Successors.--If the common bond of any group referred
to in paragraph (1) is defined by any particular organization
or business entity, paragraph (1) shall continue to apply with
respect to any successor to such organization or entity.
``(d) Multiple Common-Bond Credit Union Group Requirements.--
``(1) Numerical limitation.--Except as provided in
paragraph (2), only a group with fewer than 3,000 members shall
be eligible to be included in the field of membership of a
credit union described in subsection (b)(2).
``(2) Exceptions.--In the case of any Federal credit union
whose field of membership is determined under subsection
(b)(2), the numerical limitation described in paragraph (1)
shall not apply with respect to the following:
``(A) Certain larger groups incapable of supporting
and operating a single-group credit union.--Any group
which the Board determines, in writing and in
accordance with the guidelines and regulations
described in paragraph (4), could not feasibly or
reasonably establish a new single common-bond credit
union described in subsection (b)(1) because--
``(i) the group lacks sufficient volunteer
and other resources to support the efficient
and effective operation of a credit union;
``(ii) the group does not meet the criteria
which the Board has determined to be important
for the likelihood of success in establishing
and managing a new credit union, including
demographic characteristics, such as
geographical location of members, diversity of
ages and income levels, and other factors which
may affect the financial viability and
stability of a credit union; or
``(iii) the group would be unlikely to
operate a safe and sound credit union.
``(B) Transactions for supervisory reasons.--Any
group transferred from another credit union--
``(i) in connection with a merger or
consolidation which has been recommended by the
Board or any appropriate State credit union
supervisor for safety and soundness concerns
with respect to such other credit union; or
``(ii) by the Board in the Board's capacity
as conservator or liquidating agent with
respect to such other credit union.
``(3) Exception for underserved areas.--Notwithstanding
subsection (b), in the case of a Federal credit union described
in paragraph (2) of such subsection, the Board may allow the
membership of the credit union to include any person or
organization within a local community, neighborhood, or rural
district if--
``(A) the Board determines that such local
community, neighborhood, or rural district--
``(i) meets the requirements of paragraph
(3) and subparagraphs (A) and (B) of paragraph
(4) of section 233(b) of the Bank Enterprise
Act of 1991, and such additional requirements
as the Board may impose; and
``(ii) is underserved, based on data of the
Board and the Federal banking agencies (as
defined in section 3 of the Federal Deposit
Insurance Act), by other depository
institutions (as defined in section 19(b)(1)(A)
of the Federal Reserve Act); and
``(B) the credit union establishes and maintains an
office or facility in such local community,
neighborhood, or rural district at which credit union
services are available.
``(4) Regulations and guidelines.--The Board shall issue
guidelines or regulations, after notice and opportunity for
comment, setting forth the criteria the Board will apply in
determining whether or not an additional group may be included
within the field of membership of an existing credit union
pursuant to paragraph (2).
``(e) Additional Membership Eligibility Provisions.--
``(1) Membership eligibility limited to immediate family or
household members.--No individual shall be eligible for
membership in a credit union on the basis of the relationship
of such individual to another person who is eligible for
membership in such credit union unless the individual is a
member of the immediate family or household (as such terms are
defined by the Board by regulation) of such other person.
``(2) Retention of membership.--Except as provided in
section 118, once a person becomes a member of a credit union
in accordance with this title, such person or organization may
remain a member of such credit union until the person or
organization chooses to withdraw from the membership of the
credit union.''.
SEC. 102. CRITERIA FOR APPROVAL OF EXPANSION OF MEMBERSHIP OF MULTIPLE
COMMON-BOND CREDIT UNIONS.
Section 109 of the Federal Credit Union Act (12 U.S.C. 1759) is
amended by inserting after subsection (e) (as added by section 101 of
this title) the following new subsection:
``(f) Criteria for Approval of Expansion of Multiple Common-Bond
Credit Unions.--
``(1) In General.--The Board shall--
``(A) encourage the formation of separately
chartered credit unions instead of approving an
application to include an additional group within the
field of membership of an existing credit union
whenever practicable and consistent with reasonable
standards for the safe and sound operation of the
credit union; and
``(B) if the formation of a separate credit union
by such group is not practicable or consistent with
such standards, require the inclusion of such group in
the field of membership of a credit union which is
within reasonable proximity to the location of the
group whenever practicable and consistent with
reasonable standards for the safe and sound operation
of the credit union.
``(2) Approval criteria.--The Board may not approve any
application by a Federal credit union described in subsection
(b)(2) to include any additional group within the field of
membership of such credit union (or an application by a Federal
credit union described in paragraph (1) to include an
additional group and become a credit union described in
paragraph (2)) unless the Board determines, in writing, that--
``(A) such credit union has not engaged in any
unsafe or unsound practice (as defined in section
206(b)) which is material during the 1-year period
preceding the filing of the application;
``(B) the credit union is adequately capitalized;
``(C) the credit union has the administrative
capability to serve the proposed membership group and
the financial resources to meet the need for additional
staff and assets to serve the new membership group;
``(D) pursuant to the most recent evaluation of
such credit union under section 215, the credit union
is satisfactorily providing affordable credit union
services to all individuals of modest means within the
field of membership of such credit union;
``(E) any potential harm the expansion of the field
of membership of the credit union may have on any other
insured credit union and its members is clearly
outweighed in the public interest by the probable
beneficial effect of the expansion in meeting the
convenience and needs of the members of the group
proposed to be included in the field of membership; and
``(F) the credit union has met such additional
requirements as the Board may prescribe in
regulations.''.
SEC. 103. GEOGRAPHICAL GUIDELINES FOR COMMUNITY CREDIT UNIONS.
Section 109 of the Federal Credit Union Act (12 U.S.C. 1759) is
amended by inserting after subsection (f) (as added by section 102 of
this title) the following new subsection:
``(g) Regulations Required for Community Credit Unions.--
``(1) Definition of well-defined local community,
neighborhood, or rural district.--The Board shall prescribe
regulations defining the term `well-defined local community,
neighborhood, or rural district' for purposes of--
``(A) making any determination with regard to the
field of membership of a credit union described in
subsection (b)(3); and
``(B) establishing the criteria applicable with
respect to any such determination.
``(2) Scope of application.--Paragraph (1) shall apply with
respect to any application to form a new credit union, or to
alter or expand the field of membership of an existing credit
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